Yahoo Finance Sigma-Aldrich (SIAL) Strikes New 52-Week High - Analyst Blog
Shares of Sigma-Aldrich (SIAL) reached a new 52-week high of $138.77 on Feb 20, eclipsing the previous high of $138.67. The stock retraced a bit to close the day at $138.75.
The lab chemical and life sciences company’s one-year return is roughly 48.5%, higher than the S&P 500’s total return of around 17.1%. Average volume of shares traded over the last three months is roughly 643.7K. The company’s long-term projected earnings per share growth is around 7.8%.
Driving Factors
Sigma-Aldrich’s profits for fourth-quarter 2014, reported on Feb 12, rose year over year on healthy organic sales gains. Both revenues and adjusted earnings for the quarter beat Zacks Consensus Estimates. The company’s research business saw higher U.S. academic spending in the quarter.
Sigma-Aldrich, a Zacks Rank #3 (Hold) stock, is set to be acquired by Germany’s Merck KGaA in a deal worth $17 billion. The transaction -- subject to specific antitrust and government approvals and other closing conditions -- is expected to close by mid-2015.
The merger will create a big player in the $130 billion global life sciences industry. The integrated company will be able to cater life science customers globally with a highly attractive set of established brands and an efficient supply chain that can facilitate the delivery of over 300,000 products. The customers will benefit from the offering of a vast array of complementary products and capabilities.
Sigma-Aldrich remains focused on taking advantage of country-specific opportunities by expanding its presence in high-growth emerging markets. It is actively expanding its foothold in the Asia-Pacific region. Moreover, the company’s significant investments in sales, marketing and R&D initiatives are generating demand for its products.
Sigma-Aldrich has also taken up cost control and plant process improvement actions and is effectively managing its working capital, contributing to healthy free cash flow generation. The BioReliance acquisition, which extended the company's reach into the promising new market of biologic drugs, should continue to add to its growth.
Moreover, Sigma-Aldrich remains committed to offering incremental returns to its shareholders through dividends and share repurchases.
Other Stocks to Consider
Other companies in the specialty chemicals space worth considering include Axalta Coating Systems Ltd. (AXTA), Penford Corp. (PENX) and Daqo New Energy Corp. (DQ). While Axalta and Penford hold a Zacks Rank #1 (Strong Buy), Daqo is a Zacks Rank #2 (Buy) stock.
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